What constitutes 'good cause' for Floors To Go to terminate a franchise agreement?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
- (G) A PROVISION WHICH PERMITS A FRANCHISOR TO REFUSE TO PERMIT A TRANSFER OF OWNERSHIP OF A FRANCHISE, EXCEPT FOR GOOD CAUSE. THIS SUBDIVISION DOES NOT PREVENT A FRANCHISOR FROM EXERCISING A RIGHT OF FIRST REFUSAL TO PURCHASE THE FRANCHISE. GOOD CAUSE SHALL INCLUDE, BUT IS NOT LIMITED TO:
- (i) THE FAILURE OF THE PROPOSED TRANSFEREE TO MEET THE FRANCHISOR'S THEN CURRENT REASONABLE QUALIFICATIONS OR STANDARDS.
- (ii) THE FACT THAT THE PROPOSED TRANSFEREE IS A COMPETITOR OF THE FRANCHISOR OR SUBFRANCHISOR.
- (iii) THE UNWILLINGNESS OF THE PROPOSED TRANSFEREE TO AGREE IN WRITING TO COMPLY WITH ALL LAWFUL OBLIGATIONS.
- (iv) THE FAILURE OF THE FRANCHISEE OR PROPOSED TRANSFEREE TO PAY ANY SUMS OWING TO THE FRANCHISOR OR TO CURE ANY DEFAULT IN THE FRANCHISE AGREEMENT EXISTING AT THE TIME OF THE PROPOSED TRANSFER.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, 'good cause' for refusing a franchise transfer includes specific conditions. These conditions are related to the proposed transferee's qualifications, potential conflicts of interest, and adherence to obligations.
Specifically, Floors To Go may refuse a transfer if the proposed transferee does not meet the franchisor's current reasonable qualifications or standards. This ensures that new franchisees maintain a certain level of competence and capability. A transfer can also be denied if the proposed transferee is a competitor of Floors To Go or its subfranchisor, preventing potential conflicts of interest and protecting the brand's competitive position. Additionally, the franchisor can block a transfer if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations, ensuring that all franchisees adhere to the franchise agreement's terms.
Furthermore, Floors To Go can refuse a transfer if the franchisee or proposed transferee fails to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer. This protects the franchisor's financial interests and ensures compliance with the franchise agreement. These conditions provide Floors To Go with specific and justifiable reasons to refuse a franchise transfer, protecting the integrity and financial stability of the franchise system.